After the failure of three major U.S. banks last week, with two of them being the second and third largest banking failures in the country, Moody’s Investors Service has downgraded the rating of the U.S. banking system from “stable” to “negative.” As one of the “Big Three” credit rating firms, Moody’s cited a “rapid deterioration in the operating environment” following the collapse of these banks.
Moody’s Downgrades U.S. Banks, Financial Institutions Face Rising Deposit Costs and Reduced Earnings
Moody’s Investors Service, the American credit rating agency, has downgraded the U.S. banking sector from “stable” to “negative.” The agency cited the collapse of three banks within seven days in the United States last week. Silvergate Bank decided to voluntarily liquidate, and Silicon Valley Bank (SVB) experienced a large bank run last Thursday.
After the FDIC placed SVB into receivership, New York regulators revealed that the FDIC also took over Signature Bank on Sunday. SVB’s collapse was the second-largest banking failure since Washington Mutual (W